The case “PepsiCo in 2007: Strategies to Increase Shareholder Values” by John gamble provides detailed overview of the world’s largest beverage company which revenues is estimated at approximately $35 million. The company is going to increase its shareholders value by implementing product innovations, restructuring, international expansion, relations with distribution allies, and strategic acquisitions.
As a result, the company has managed to increase its revenues up to $1billion or 15-20% per year.It is necessary to underline that product innovations were oriented at consumer health and wellness and, therefore, they became very popular among people who take care of eating health food and drinking health beverages. For more than ten years the strategy ‘Power of One’ has been gaining popularity boosting company’s volumes and identifying new product formulations. According official statistics, PepsiCo has the largest market share in many international beverage markets and salty snacks.
If the company will manage to sustain its current growth rates, it will be able to generate cash flows of more than $10 billion in 2007-2009. Actually, the company is successful as it always has potential strategy how to generate revenue growth, to increase sales, to attract more customers and to increase brand loyalty. Building shareholder value is key concern in 2007 and the company had diversified into sweet and salty snacks, orange juice, bottled water, ready-to-drink teas, etc.The situation with PepsiCo shows that it is a real possibility to become successful in domestic and international market.
The situation can be applied to real world business which should be interested in product innovations, diversification and expansion policies. From PepsiCo example companies may see how to increase sales, to develop successful growth strategies and to attract customers. Moreover, PepsiCo holds position that abilities to respond to customers’ changing desires is the bet o success.
